Macmahon Slumps on Project Cost, Profit Forecast: Sydney Mover
Macmahon Holdings Ltd. (MAH), an Australian engineering-services company, plunged by the most in more than three years after cutting its profit forecast for fiscal year 2013.
The Perth-based company slumped 39 percent to 32.5 Australian cents at the close of trading in Sydney, the biggest fall since April 2009. It was the biggest loser among companies in the benchmark S&P/ASX 200 index.
Full-year profit after tax will be between A$20 million ($21 million) and A$40 million, the company said in a statement to the Australian stock exchange today. It had last month forecast a 20 percent increase from the previous period’s net income of A$56.1 million.
Macmahon has identified several problems at its Hope Downs 4 Rail Earthworks project in Western Australia, which will result in “significant additional costs” to meet its schedule, the company said. It has also lowered its estimate of the volume of new construction work it may win and perform in the year ending June 30, 2013, it said.
Chief Executive Officer Nick Bowen has resigned and will be replaced by Ross Carroll, Macmahon said in a separate statement.
Macmahon has lost 42 percent this year compared with an 8.9 percent gain in the benchmark index. Leighton Holdings Ltd. (LEI), which owns 19 percent of Macmahon, according to data compiled by Bloomberg, has fallen 13 percent.
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